Labour market policy and poverty : exploring the macro-micro linkages of minimum wages and wage subsidies

• Main Author: Pauw, Karl
• Other Authors: Leibbrandt, Murray
• Format: Doctoral Thesis
• Language: English
• Published: University of Cape Town 2014
• Subjects: Economics
• Online Access: http://hdl.handle.net/11427/5715

Includes abstract. === Includes bibliographical references (p. 220-228). === This study adds value to the South African literature on labour market policy evaluation and their poverty impacts in general, and minimum wages and wage subsidies in particular, both in terms of the theoretical and descriptive analyses provided. Various possible modelling approaches are explored, with careful consideration of the advantages and limitations of each. A rich set of model results is also generated. Under both the policies evaluated, the poverty outcome is shown to generally be positive but small. Furthermore, the outcome is highly sensitive to the wage elasticity of demand: while minimum wages tend to be more effective in reducing poverty when the wage elasticity is low, wage subsidies generate superior outcomes under a high wage elasticity scenario.